IDFC Bank Company Analysis

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Company Profile : IDFC The parent of the bank is one of the Public Financial Institution, Other are LIC, ICICI , IDBI IFCI UTI . It is founded on the recommendations of the ‘Expert Group on Commercialization of Infrastructure Projects’ under the Chairmanship of Dr. Rakesh Mohan. The group is conceptualized to channel private capital into commercially viable projects.  As per the recommendation  IDFC was incorporated on 30 January 1997 with its registered office in Chennai and started operations on 9 June 1997. In 1998 the company registered with the Reserve Bank of India (RBI) as a non-banking financial company and in 1999 it formally became a Public Financial Institution. In 2013 when RBI decided to give banking license, IDFC is among 26 applications.

With the 23 Branches The bank launch itself on 1 October 2015. The bank is also listed on BSE and NSE.

As the parent is related to the Infrastructure Finance, the bank also concentrating on Infrastructure. Before the Demerger there was 4*4 plan. Which is very big and good even for bank as Transportation, Telecommunications and IT, energy are still important for growth.

As per RBI rules The bank need to Keep around 40% business in rural areas. IDFC Bank is doing that with acquiring Grama Vidyal Microfinance.

Share Holding Pattern  

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Financials and Ratio

 2014-152015-16
Loan Book 045699.43
ROE 03.42
ROA 00.63
EPS02.34
Book Value (506.98)40.18
Efficiency 019.34
Dividend per Share 00.25
Tier 1 Capital 022
CASA 05.41
Net NPA to Loan Book 02

Future Prospects : Though it is difficult to make any statement about its future but I am trying with the help of past of IDFC.

IDFC , Infrastructure Development Finance Corp, The parent of the bank was enjoying the relation with industry even before receiving banking license. There was a loan book but not as full fledged Universal Commercial Banking License. Which is now with them.

Maybe it’s difficult for them to fulfill requirements of RBl like CRR Sir, But the technology is very positive for them. Recently they come up with Online FD. Which paying little higher interest then other. Good move.

As leadership is very important for bank, there is good leadership in bank. Even though it is looking like Private Bank but still government of India holds around 7.5% stake. Which it my sell. Acquire or hiring workforce and setting up branches are looking challenging task for bank but there are some positive also. Like Online banking.

So many people are calling it Next HDFC Bank in making, Maybe. As for both of them the parent institution, Leadership and contact with Industry is plus. But HDFCBANK changes itself into retail focus. Right now there is Big demand for infrastructure funding and IDFC Bank can Fulfill it.

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About Ashutosh Tilak

Tracking Indian Capital Market since 2010. Finance Student, On this blog I am writing about finance and Investing. You can contact me analystashu@gmail.com or @androidashu & @InsideFinanc on twitter